The author is a Forbes contributor. The opinions expressed are those of the writer.

Loading ...

Loading ...

This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe

Continued from page 2

Deborah, 40

How Much She's Saved: $89,000 in a 401(a) and a 403(b)

How She Did It: I started saving for retirement with my first job at the age of 24. I was making $28,000, contributing 5% of my salary, and the university where I worked contributed 10%. That feels unreal to me today.

When I was 28 I changed jobs and started making $38,000. I kept the same contribution--5% from me--and got 5% from the university. I stayed in that job for 10 years and put away a lot.

Almost five years ago, after I got married and had my first child, I quit. I had a really great maternity leave where, for the first year, I worked three days a week for my whole salary. When the time came to resume working full-time, our parents offered us some support if I wanted to stay home full-time with our child. There was no thought about retirement at that point; this huge life change absorbed me entirely. I was making just under $60,000, and my retirement account was about $70,000.

Now I have two sons in private school, and tuition for them is $28,000. My husband makes $80,000, and freelances a little. Our parents chip in $37,000 a year, and they are the only contributors to my sons’ 529 college savings plans.

I hope when I return to the workforce in a year that I'll find a position with similar great benefits, but given today's reality, that's probably a pipe dream. I'm really glad that I socked money away early on. When I started my career, I didn't know I was going to take this five-year break from the workforce. It's comforting to me that I have what feels like a significant amount.

How Much She's Saved: Has more than $190,000 in a 401(k), plus a pension

How She Did It: I started at my company as a customer service rep for a utility company when I was 18. I viewed it as a short-term job and didn't imagine I would have an entire career at the same company. I tuned out anything about retirement—I just wanted the biggest paycheck possible.

After a few years, a friend said, "You should really do it—the company will give you money," so I signed up. I didn't miss seeing the extra money in my take-home pay. The company matched up to 6% of my paycheck, so every year, I put in 12% of my salary--6% from me and 6% from my company. I was making around $30,000 then.

At 22, I went back to school and worked part-time while I was in college. When I graduated, I wasn’t able to find another job that would pay me more than I was making, so I stayed and that blossomed into other careers at my company. In 1990, I moved to the IT department, when my salary was probably in the mid-50s. I’ve been there ever since but have had different positions and a steady progression of raises. Today I make almost $100,000 as a business analyst.

On top of my 401(k), I will also have a pension. The company ended that for people hired after 1990, but I’m grandfathered in. I should be able to get at least $2,000 a month from that when I retire.

My husband, who is already retired, has a pension and gets $3,500 from it. We’ve had a relatively low mortgage. We bought the house when we were 25, when it was very cheap. (We live near San Francisco.) Signing up for the 401(k) was the best thing I ever did, and the next best was to get the house.

LearnVest's recommendation to Chris: See a financial advisor to find out if she is on track to retire comfortably. LearnVest Planning Services offers such financial plans.

Nieves**, 74

Retired: living on Social Security income and support from daughter and son-in-law

How She Did It: I was born in Havana, Cuba, and moved to Miami when I was 18. I started working as a restaurant cook making a dollar an hour. In 1961, I moved to New York City and worked during the day in a factory making aluminum lawn chairs and in the evenings as a seamstress. I brought the rest of my family over from Cuba, which cost $1,000 in legal fees, and helped them pay their expenses until they got on their feet. I worked a lot of overtime to make $300 a week and slept maybe two to four hours a night.

In 1963, I got married to an American man and started learning English, but he told me that I didn't have to because he would take care of us. In 1980, we separated, and in 1990, I started a commercial cleaning business in Houston and made $1,000 a week. I sent money to my mother and to my children. In 1995, my husband and I got divorced, but I received no alimony. When we were separated, I gave him $35,000 and asked him to put it away for me, but he spent it instead. In 2000, I moved to California, closed my business in Texas and began working at a hotel chain, earning about $280 a week as a hostess/cashier.

Throughout this whole time, I was not saving for retirement. Even though we were divorced, my ex-husband was my bank and my everything. Nobody ever spoke to me about retirement. I always thought I would be able to work and that Social Security would take of everything when I needed it.

In 2003, I was taking a room service order back to the kitchen and a co-worker playfully put his foot out, but I tripped and fell into the corner of a sink. I had extensive ligament damage to my shoulders and wrist. After surgery on my shoulders, the hotel said I was too old to return to work. I was 65.

Now I live with my daughter and son-in-law and receive $684 a month from Social Security. After I had to stop working, I was depressed that I worked so hard and now have to depend on others. I buy groceries and pay for my personal expenses, but my daughter and son-in-law pay for everything else. We make it work.

*At her request, Chris's name has been changed to protect her identity.

**Because of Nieves's limited English skills, her story was told through an interpreter.